The secret to a profitable cleaning company is MANAGING YOUR EXPENSES!

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by Tom Watson on April 13, 2014

All businesses require money to operate. That’s a fact and it’s indisputable. Your expenses include insurance, marketing materials, phones and cleaning supplies to name just a few.

The key to running a profitable cleaning business is keeping those costs to a minimum. This may come across as a pretty simple lesson, but many people probably spend more than they realize.

I know this lesson firsthand, as it has bitten me in the backend a few times over the years. Despite “thinking” I was doing a great job at keeping my costs in check I had a few areas where my spending was not so frugal.

The lesson my accountant taught me about expenses

I remember asking my accountant one time how my expenses looked. Did anything stand out? I really wanted to know where I stood in relation to other companies. It didn’t have to be a cleaning company, just other businesses in general.

At a glance he told me I was spending too much for both my landlines and my cell phones. Then he looked a little further and said I spent too much for eating out and that I should also reevaluate what I spent for my office.

He thought I could do better if I just tried a little harder! Now you have to keep in mind the fact that I really trust my accountant’s wisdom. He is not some small little hometown number cruncher with just a few clients.

The guy is super successful in several different finance related businesses so I take his word as the gospel as far as money goes. Before leaving his office he told me something very important. Something that has shaped the way I look at everything.

He told me flat-out that “every single expense in your business needs to be constantly reevaluated”. Not once in a blue moon, but regularly. If you don’t do this your business will get fat around the waist. When this happens it may be too late to fix it.

He went on to say that much like a person putting on weight, “it happens so slowly you don’t realize it at first”. A little too much excess here and there will pack on the pounds so to speak. I took the lesson to heart and I’m much better off as a result!

How I look at business expenses now

Though I’m certainly not perfect, my expenses for the business are extremely low. I carefully consider the costs of anything that forces me to open my wallet. I regularly compare prices from different vendors to make sure I’m giving myself the best deal possible.

The major things I look at are my vehicle insurance premiums, my healthcare costs, my chemical usage, my paper products, my landline and cell phones fees and my office supply costs. The money you spend here added together totals quite a bit!

I’ll wrap this up by sharing some success stories of mine. We once saved $465.00 per month by changing our health insurance policy. We got the same coverage, just for TONS less. This shaved $5,580.00 off my expenses in one fell swoop.

I’ve also switched vendors for paper products, which in some cases saves me 25% of what I used to spend. We even switched vehicle insurance and saved close to $200.00 per year. The LESS you spend the MORE you earn!

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{ 12 comments… read them below or add one }

1 Francisco April 13, 2014 at 9:33 pm

Very, very true Tom! Thanks for the grate advice!

Say Hi to Sue for me!

2 james perry April 13, 2014 at 9:45 pm

hello,

my question is pertaining to, service agreements. I recently had a cleaning job we done for an apartment manager, during my employee
cleaning he always provide the customer to look at all the dirt we pull from the carpet, after finishing the job the manager decide he not gonna pay us. is their a form I can use to get the customer to sign for services and pay up front before we clean?

3 Tom Watson April 13, 2014 at 9:50 pm

Hi Francisco! Sue said HI!

4 Tom Watson April 13, 2014 at 9:54 pm

Hi James! If people hire you to perform a service, then THEY PAY. They don’t get to decide whether or not they are going to pay based upon the results! Please give me more details… is this the norm for all customers or just this one?

5 pernell April 13, 2014 at 10:37 pm

hello James if you have an attorney have the attorney to contact the manager your attorney will get the owner information from the manager this happened to me once before and I have my check within 48 hours no owner want to be contacted by an attorney for outstanding past due bill.

6 Ron April 15, 2014 at 12:33 pm

Hi Jim, As long as you have a contract with them then they must pay you for the work you done. If not take them to small claims court.

7 Commercial Cleaning services April 15, 2014 at 2:55 pm

Although it is important for a business to keep expenses low in order to make profits, it is important not to cut corners in the cleaning industry. It is easy for businesses to be tempted to opt for cheaper cleaning products to raise their profit margins, however, I would advise cleaning companies to avoid doing this. The cleaning industry is all about….cleanliness believe it or not! As a cleaning business, the main aim should be to clean to the best possible standard, if you want to raise profit margins, then it should be the price you charge for a good service that goes up.

8 Tom Watson April 15, 2014 at 4:17 pm

Well said!

9 Brandon April 28, 2014 at 1:16 pm

Hi Mr. Watson, I have a quick question. I’m trying to market my services to churches right now, but it seems like a lot of them usually have their church members take care of the cleaning. I was wondering if you could give me some advice on how to combat this, and tips on how to convince them that they need a professional company to take care of the ckeaning. Thank you

10 Tom Watson April 28, 2014 at 1:36 pm

Hi Brandon! You can’t really convince someone to hire you. You can just do your best to point out why a professional would be a better fit (more reliable, insured against injury, results oriented etc…). The best thing you could do is just market to more of them, as eventually you’ll find one that needs (or desires) a professional.

11 mark taylor May 7, 2014 at 2:40 pm

I am starting my janitorial business, an the help your giving others advice is helping me just reading your commits. thank you so very much. I will be in contact .

12 Tom Watson May 7, 2014 at 3:54 pm

Hi Mark! I’ll be here when you need me.

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